The pound was little changed against the dollar and euro before a government report that economists said will show the U.K. budget deficit narrowed in September from a year earlier.
Sterling was about 0.6 percent from the strongest in three weeks versus the greenback before delayed U.S. payrolls data today forecast to show American employers added the most jobs since April. Bank of England Deputy Governor Charlie Bean said the U.K. recovery is likely to be modest by historic standards. The Debt Management Office is scheduled to sell bonds maturing in 2068 via banks this week. U.K. gilts were little changed.
The pound was at $1.6129 at 9:19 a.m. London time after rising to $1.6225 on Oct. 18, the highest since Oct. 3. The U.K. currency fell 0.1 percent to 84.80 pence per euro.
The U.K. government’s budget shortfall excluding temporary support for banks fell to 11.3 billion pounds in September, compared with 12.07 billion pounds a year earlier, according to a Bloomberg News survey. The economy grew 0.8 percent in the third quarter from 0.7 percent in the previous three months, a separate survey showed before the Oct. 25 report.
The U.S. Labor Department will say payrolls increased by 180,000 last month after rising by 169,000 in August, economists predict. The data was originally due to be released Oct. 4 and was delayed by a partial government shutdown.
“There is still a long way to go before we can say the economy is mended,” Bean said today in a speech in London. “Until that is the case, monetary policy will need to remain supportive and the guidance we issued in August was intended to make that clear.”
The pound appreciated 4.7 percent in the past six months, the best performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro strengthened 3.8 percent, while the dollar fell 1.3 percent.
The benchmark 10-year gilt yield was at 2.74 percent. The price of the 2.25 percent bond due September 2023 was 95.82.
U.K. gilts lost 3.2 percent this year through yesterday, according to Bloomberg World Bond Indexes. Treasuries dropped 2.2 percent and German bonds declined 1.9 percent.
Chart: WorldWideMarkets Alpha Trader